Vietinbank Securities has published the Weekly Investment Strategy Report on 4th December, 2023 with the executive summary presented below:
- According to the data from the Department of Commerce, the GDP of the U.S. for the third quarter of 2023 grew by 5.2%, surpassing the preliminary estimate of 4.9% and the forecasted 5% by economic experts. This indicates that the actual economic growth of the U.S. is stronger than the pressure from inflation. Therefore, it can be expected that the Federal Reserve has completed the interest rate hike cycle, and the U.S. economy may experience a “soft landing,” meaning a moderate interest rate increase to cool down the economy and reduce inflation without pushing it into a recession.
- Meanwhile, on November 29, the State Bank of Vietnam announced an adjustment to credit growth targets: Commercial banks that have reached 80% of the announced credit target will be proactively supplemented with additional credit limits. Additionally, priority will be given to banks focusing on credit in sectors prioritized by the government, and interest rates for loans have been lowered to a low level in recent times. However, with limited time for commercial banks to implement these measures as 2023 is coming to a close, we anticipate that credit growth in 2023 will reach around 9% – 9.5%, falling short of the State Bank’s target of 14%.
- The VN-Index recorded an increase of about 0.6% over the past week, closing above the 1,100-point mark. Caution continues to dominate the market sentiment, leading to a sharp decline in liquidity and the average daily trading value, reaching values of 13,077 billion VND and 644 million shares, respectively. It is noteworthy that during the past week, there has been a significant shift of funds into oil stocks and financial services, with increases of 5% and 4.76%, respectively.
- With the expected continuation of cautious sentiment in the coming week due to information related to the inspection of the State Bank of Vietnam (SBV) regarding the implementation of credit growth policies, the VN-Index is anticipated to fluctuate within a narrow range of 1,090 – 1,120 points. Short-term investors are advised to maintain a stock/cash ratio of 30/70 to be prepared for market volatility. Meanwhile, long-term investors are recommended to restructure their investment portfolios, reducing allocations in sectors expected to face challenges in 2024, such as banking (potential continued provisioning for bad debt from manufacturing enterprises), aquaculture, and textiles (main export markets like the EU and China are forecasted to face weakening consumer demand). Some sectors are suggested to increase allocations as the most challenging period is expected to be over, including steel (HPG, HSG, NKG), civil construction (TCD, HTN, CTD), real estate brokerage (DXS, KHG), and residential real estate (NLG, KDH, NTL).
